Minnesota Power agrees to smaller bill increase for customers in settlement

Minnesota Power has agreed to considerably shrink its request for increased electrical charges, main to a smaller increase on buyer payments as soon as state regulators approve.

The Duluth-based utility stated Friday it had struck a deal for a 4.9% price increase for residential and small enterprise customers, plus a roughly 4.4% hike for industrial and enormous industrial customers. Minnesota Power had originally asked for a 12% increase for all customers, value $89.1 million.

The Minnesota Public Utilities Commission (PUC) nonetheless has to weigh in on the smaller $34 million price increase. The firm’s settlement was with the Minnesota Department of Commerce, the state Attorney General’s workplace and a coalition of enormous industrial customers together with taconite mines and paper mills.

“This settlement still allows us to move forward on the three important goals that we had when we first filed this rate case, including transitioning to a carbon-free power supply, making those investments that preserve safety and reliability and balancing that with offering competitive rates for customers,” stated Jennifer Cady, vp of regulatory and legislative affairs for Minnesota Power.

A smaller price hike additionally means refunds for customers. The PUC approved a temporary 8.6% increase that started in January.That increase amounted to an additional $8 a month for the typical residential buyer in contrast to 2023 payments. But if the PUC passes these decrease charges, customers will obtain the distinction with curiosity: roughly $5 monthly for typical residential customers, per Minnesota Power.

The settlement would set a vital revenue measure often known as return on fairness at 9.78%, decrease than Minnesota Power’s plan for 10.3% however greater than what Commerce and enormous energy customers initially beneficial.

The PUC beforehand granted a 9.5% price increase for Minnesota Power in January 2023, also much smaller than the company had wanted.

Minnesota Power has 150,000 residential and industrial customers throughout northeastern Minnesota. It additionally serves energy-hungry iron mines, pipelines and the paper business, all of which make up almost 70% of the utility’s retail gross sales.

In November, the corporate stated it has the lowest total bills for residential customers in the state, plus electrical charges for residential customers beneath the nationwide common. At the identical time, the utility has shifted its energy combine from 95% coal in 2005 to almost 60% renewable power now as it really works to meet a brand new state regulation requiring a carbon-free electrical grid by 2040.

Cady stated there may be usually a disagreement about what prices ought to fall on residential customers and Minnesota Power’s massive industrial customers. She stated it was notable the corporate managed to strike a take care of these huge customers and state officers who symbolize residential customers. This was additionally the primary time Minnesota Power had reached a price case settlement with each celebration who intervened.

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